New COMPANY PRESENTATION August 2020mint.listedcompany.com/misc/presentation/20200819-mint... ·...
Transcript of New COMPANY PRESENTATION August 2020mint.listedcompany.com/misc/presentation/20200819-mint... ·...
COMPANY PRESENTATION – August 2020
Forward Looking Statement
2
Statements included or incorporated in these materials that use the words "believe", "anticipate", "estimate", "target", or "hope", or that otherwise relate to objectives, strategies, plans, intentions, beliefs or expectations or that have been constructed as statements as to future performance or events, are "forward-looking statements" within the meaning are not guarantees of future performance and involve risks and uncertainties that could cause actual results to differ materially from historical results or those anticipated at the time the forward-looking statements are made. MINT undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. MINT makes no representation whatsoever about the opinion or statements of any analyst or other third party. MINT does not monitor or control the content of third party opinions or statements and does not endorse or accept any responsibility for the content or the use of any such opinion or statement.
AGENDA
2Q20 in Review
Minor Hotels
Minor Food
Minor Lifestyle
Corporate Information
Response to COVID-19: Immediate & Long-term Plans
nhow Amsterdam RAI
2Q20 IN REVIEW
Recap – Impact from COVID-19
5
Since the outbreak of COVID-19, MINT’s business has been impacted globally. April has by far been the month with minimal operation across the three business units. Majority of the reopenings started in late May, and continued into June & July.
News of COVID-19
Wuhan / China lockdown
Italy lockdown, followed by other
European countries
Many countries under lockdown
globally
Many countries start to loosen lockdown
measures
Gradual border reopening of
some countries
535 536
247115 144
356 389
2,289 2,3491,947
1,5211,890 2,037
2,179
478 476
34 48
458 464 474
MINOR HOTELSNo of hotels in
operation
MINOR FOODNo of outlets in
operation
MINOR LIFESTYLENo of outlets in
operation
January February March April May June July
Further easing of lockdowns
2Q20 Performance Recap
6
NET PROFIT
In 2Q20, MINT’s core revenue declined by 79% y-y, as majority of all three business units were temporarily closed for at least two months in the quarter with many countries under lockdown because of the COVID-19 outbreak. MINT reported net loss both pre- and post- TFRS 16 in 2Q20. But with aggressive cost reduction of over 50% during the quarter, the severity has been alleviated with an improving m-m trend throughout the quarter.
* Non-core items are detailed on page 44.
* Excludes non-core items
2Q20 REVENUE CONTRIBUTION
-79% y-yMinor
Lifestyle 8% Minor
Food60%
Minor Hotels32%
REVENUE
THB 6,682
million
NM
0
10,000
20,000
30,000
40,000
2Q19Reported
Non-coreItems
2Q19Core
MinorHotels
excl NHH
NHH MinorFood
MinorLifestyle
2Q20Core
Pre-TFRS16
TFRS16Impact
excl NHH
TFRS16Impacton NHH
2Q20Core
Post-TFRS16
Non-coreItems
2Q20Reported
THB million
-9,000
-6,000
-3,000
0
3,000
2Q19 Reported
Non-core Items
2Q19 Core
Minor Hotels
excl NHH
NHH Minor Food
Minor Lifestyle
2Q20 Core
Pre-TFRS16
TFRS16 Impact
excl NHH
TFRS16 Impact on NHH
2Q20 Core
Post-TFRS16
Non-core Items
2Q20 Reported
THB million
1,786
-6,006
-1,285
31,455
-1,881
-
-62
31,393
-6,748
6,682 6,698
+315 2,101
-650 -97 -286
-549+17
-6,869 -7,162-8,448
6,682--15,534
-8
-2,216
MONTHLY NPAT TREND
-2.8 -2.4 -2.0
-4.0
-3.0
-2.0
-1.0
0.0
1.0
Apr-20 May-20 Jun-20
THB billion
* Core NPAT post-TFRS16
International Presence
7
With a solid diversification strategy implemented, MINT’s footprint was in 63 countries at the end of 2Q20 across its hospitality and restaurant businesses.
*Excludes non-core items
Minor Food
Combination
Minor Hotels
REVENUE CONTRIBUTION
57%
27% 38% 29%
43%
73% 62% 71%
0%
25%
50%
75%
100%
2014 2019* 1H20* 2024F
International
Thailand
MINOR HOTELS
Anantara Golden Triangle Elephant Camp & Resort
Minor Hotels – Financial Highlights
9
2Q20 revenue declined by 91% y-y, attributable to all businesses and geographies, with April and May being the hardest hit months by the COVID-19 pandemic. While Minor Hotels’ successful cost cutting initiatives (with cost reduction of almost 60% during the quarter) helped alleviate such adverse impact, EBITDA and NPAT pre-TFRS 16 turned negative in 2Q20 because of the revenue shortfall. NHH continues to be the biggest contributor to the loss, contributing over 70% of Minor Hotels’ net loss in 2Q20. Post-TFRS 16, Minor Hotels reported core net loss of THB 6.7 billion.
* The financials above reflect performance from operation, and therefore exclude non-core items as detailed on page 44.
24,408
2,126 2,126
THB million
-91%
Revenue
5,282
-2,275 -5,094 1,825
-6,687 -6,397
NM NM
EBITDA NPAT
% Margin
21.6%7.5%
MINOR HOTELS – FINANCIAL PERFORMANCE
2Q19 2Q20 Pre-TFRS 16 2Q20 Post-TFRS 16
PERFORMANCE SNAPSHOT – BY BUSINESS
Owned & Leased
Management Letting Rights
Managed Hotels
Mixed-Use Business
2Q20 Revenue Change Y-Y (THB)
93%
67%
43%
79%
BUSINESS PERFORMANCE SNAPSHOT – BY GEOGRAPHY
2Q20 Revenue Change Y-Y
(THB)
Thailand EuropeAustralia &
New ZealandMaldives &
The Middle EastThe Americas
66%92% 93% 85% 102%
Minor Hotels – International Presence
10
In recent years, MINT has implemented a solid diversification strategy. Today, MINT operates hotels and spas under a combination of owned, leased and management business models in 55 countries. MINT also expects its diversification to positively help the recovery process from COVID-19.
* Excludes non-core items
Management
Combination
Investment
New Destinations in Pipeline
Hubs
REVENUE CONTRIBUTION
67%
14% 13% 12%
33%
86% 87% 88%
0%
25%
50%
75%
100%
2014 2019* 1H20* 2024F
International
Thailand
Owned & Leased
58%
Managed9%
MLR21%
Mixed-use12%
Owned & Leased Hotels
11
In terms of business model, owned and leased business contribute 58% of Minor Hotels’ revenue in 2Q20, lower than normal, as majority of the hotels have been forced closed during the lockdown of many countries with the COVID-19 outbreak. In terms of geography, Europe is the major contributor with 52% of Minor Hotels’ revenue. Australia & New Zealand was the second largest contributor as all properties remained operational throughout the quarter.
SYSTEM-WIDE ROOM CONTRIBUTIONBy Ownership
SYSTEM-WIDE ROOM CONTRIBUTIONBy Geography
2Q20 REVENUE CONTRIBUTIONBy Business
2Q20 REVENUE CONTRIBUTIONBy Geography
Owned26%
Leased47%
JV 2%
Managed16%
MLR9%
75,187 Rooms*
THB 2,126
million
Thailand8%
Europe52%Americas
0%
Australia & New Zealand
22%
Maldives & Middle East
3%
Others15%
Asia11%
Europe63%
Americas11%
Oceania9%
Middle East & Africa 6%
75,187 Rooms*
* Entire portfolio including temporarily closed hotels
** As at end of June 2020
* Entire portfolio including temporarily closed hotels
** As at end of June 2020
Owned & Leased Hotels
12
Number of rooms of the entire owned & leased hotel portfolio increased by 2% y-y in 2Q20. However, RevPar declined by 95%, primarily because of decline in occupancy with temporary closure of the majority of hotels during the quarter because of the adverse impact of COVID-19. As a result, revenue of owned & leased hotels declined by 93% y-y in 2Q20. Minor Hotels’ business was most significantly impacted by the COVID-19 pandemic in April, with sales improvement in second half of May onwards, as hotels started to reopen.
System-wide-38%
Organic excl FX-37%
53,262 54,470
2Q19 2Q20
No of Rooms
74%
6% 6%
2Q19 2Q20
+2%
2Q19 2Q20
Occupancy
Organic-68%
System-wide-68%
4,109
2,577 2,563
2Q19 2Q202Q19 2Q20
ADR (THB)
QUARTERLY OPERATIONAL STATS*
System-wide-95%
Organic excl FX-95%
3,053
147 144
2Q19 2Q202Q19 2Q20
RevPar (THB)
1% -6% -70% -99% -98% -89% -72%
Organic RevPar Growth - THB (y-y)Jun
MONTHLY REVPAR TREND
Entire Portfolio Opened Hotels Only
Jan Feb Mar Apr May Jul
2% -5% -69% -96% -93% -84% -65%
Organic RevPar Growth - THB (y-y)JunJan Feb Mar Apr May Jul
* Entire portfolio including temporarily closed hotels
2% -4%-47% -36%-77% -66%-99% -100%-98% -95%-98% -92%-93% -82%
Monthly 2020 Bangkok RevPar Growth -THB (y-y)
Monthly 2020 Provinces RevPar Growth -THB (y-y)
Owned Hotels – Thailand & Maldives
13
The two largest geographies for Minor Hotels outside of Europe are Thailand and the Maldives. Hotels in Thailand gradually reopened since May, catering primarily to domestic tourists. As a result, RevPar started to improve in June onwards, especially in the provinces such as Hua Hin. Hotels in the Maldives were closed throughout 2Q20, and will remain so in 3Q20, with the plan to reopen in 4Q20, in time for its high season.
OPERATIONAL STATS – THAILAND (ORGANIC)
73%
2%
5,367
3,309
2Q19 2Q20
3,891
80
-71% -38% -98%
Jan Feb Jan FebMar Mar
Occupancy ADR (THB) RevPar (THB)
OPERATIONAL STATS – MALDIVES (ORGANIC)
57%
0%
374
-
2Q19 2Q20
214
-
-57% -100% -100%
Occupancy ADR (USD) RevPar (USD)
18%-20% -53% -100%-100% -100% -100%
Monthly 2020 Maldives RevPar Growth - USD (y-y)
Jan Feb MarApr May Apr May Apr MayJun Jun JunJul Jul Jul
Owned & Leased Hotels – Europe & The Americas
14
Hotels in Europe & the Americas are the largest contributor to owned & leased hotel portfolio. 2Q20 RevPar of Europe & the Americas portfolio declined by 95% in Euro term, from the temporary closure of the majority of hotels amidst COVID-19 situation. Hotels in Europe started to reopen since late May, as European countries relaxed their lockdown measures. As at end of June, approx. 65% of the hotels in Europe are open, with the target of 100% opened by end of September. For Latin America, most of the hotels remained closed as the situation is still fluid.
-95% -97% -95% -91% -99%
Spain Italy Benelux Central Europe
Latin America
Spain 38%
Italy7%
Benelux 25%
Central Europe
30%
Americas0%
OPERATIONAL STATS – EUROPE & THE AMERICAS (ORGANIC)
75%
6%
110
73
2Q19 2Q20
82
4
-69% -34% -95%
Occupancy ADR (EUR) RevPar (EUR)
2Q20 y-y Organic RevPar Decline2Q20 Revenue Contribution
Note: Europe & the Americas include hotels under NHH portfolio and hotels in Portugal and Brazil
MONTHLY REVPAR TREND
9% 3% -70% -99% -98% -87% -71%
Europe & the Americas RevPar Growth - EUR (y-y)
Jan Feb Mar Apr May Jun
Entire Portfolio
Opened Hotels Only
Jul
10% 5% -70% -96% -94% -82% -63%
Europe & the Americas RevPar Growth - EUR (y-y)
Jan Feb Mar Apr May Jun Jul
Asset-Light Businesses
15
MINT’s asset light businesses include management letting rights (MLR) of serviced-suites primarily under the Oaks brand in Australia and New Zealand, together with the hotel management contracts under Minor Hotels’ brands. Even though management letting rights business remained operational, similar to others, both businesses were impacted by the COVID-19 outbreak, especially in April and May, with improvements since June onwards.
MANAGEMENT LETTING RIGHTS
111
38
2Q19 2Q20
2,673
831
-6% -66% -69%
No of Rooms RevPar (AUD) RevPar (THB)
6,989 6,572
MANAGED HOTELS
13,408 12,316
No of Rooms
-8%System-wide
-85%Organic excl FX
-82%
2,905
515 431
2Q19 2Q202Q19 2Q20
RevPar (THB)
4% -5% -37% -78% -70% -47% -35%
Monthly 2020 AUD RevPar Growth (y-y)
Jan Feb Mar
2Q19 2Q20
5% -11% -55% -92% -82% -72% -62%
Monthly 2020 THB excl FX RevPar Growth (y-y)
Jan Feb MarApr May Apr MayJun JunJul Jul
Hotel Expansion Pipeline – 73 Hotels; 14,194 Rooms
• Rome, Italy 238 rms• Budapest, Hungary 185 rms• Venice, Italy 64 rms• Florence, Italy 86 rms• Budapest, Hungary 138 rms• Prague, Czech Republic 152 rms
• Hannover, Germany 89 rms• Venice, Italy 100 rms
MA
NA
GED
/ M
LRS
• Frankfurt, Germany 428 rms• Monterrey, Mexico 120 rms• Cagliari, Italy 100 rms
• Frankfurt, Germany 375 rms
OW
NED
& L
EASE
D
50 Hotels / 10,165 Rooms
• Nanjing, China 120 rms• Ras Al Khaimah, UAE 174 rms• Doha, UAE 292 rms• Busan, Korea 570 rms• Cam Ranh, Vietnam 397 rms• Nha Trang, Vietnam 280 rms• Phnom Penh, Cambodia 35 rms• Ras Al Khaimah, UAE 225 rms• Muscat, Oman 206 rms• Nairobi, Kenya 120 rms
• Bahia, Brazil 50 rms
• Khon Kaen, Thailand 79 rms• Chengdu, China 202 rms• Lima, Peru 164 rms• Iquique, Chile 135 rms• Feira de Santana, Brazil 207 rms• Lima, Peru 265 rms• Santiago, Chile 146 rms
• Sharjah, UAE 233 rms• Jeddah, Saudi Arabia 328 rms
• Cam Ranh, Vietnam 324 rms• Ho Chi Minh City, Vietnam 217 rms
• Fortaleza, Brazil 130 rms
• Guadalajara, Mexico 120 rms• Aguascalientes, Mexico 105 rms• Mexico City, Mexico 144 rms• Panama, Panama 83 rms
• Zhuhai, China 100 rmsOthers
23 Hotels / 4,029 Rooms
• Bang Krachao, Thailand 62 rms
• Krabi, Thailand 83 rms• Dubai, UAE 527 rms
• Chengdu, China 201 rms
• Toowoomba, Australia 50 rms• Cairns Esplanade, Australia 60 rms• Hangzhou, China 132 rms
• Murano, Italy 104+38 rms• Doha, Qatar 228 rms
• Ubud, Bali, Indonesia* 71 rms
• Nice, France 152 rms
• Khao Lak, Thailand 328 rms
• Fares Island, Maldives* 200 rms
• Milan, Italy 185 rms• Santander, Spain 64 rms• Alicante, Spain 63 rms
• Copenhagen, Denmark 394 rms
• Milan, Italy 100 rms• Hamburg, Germany 261 rms
• Hamburg, Germany 136 rms
• Phi Phi Island, Thailand 107 rms• Riyadh, Saudi Arabia 163 rms
• Yangon, Myanmar 250 rms• Phan Thiet, Vietnam 516 rms• Ho Tram, Vietnam 410 rms• Savanne, Mauritius 156 rms• Sifah, Oman 300 rms• Kota Kinabalu, Malaysia 386 rms
• Hangzhou, China 166 rms
• Phuket, Thailand 500 rms• Yangon, Myanmar 221 rms
• Hangzhou, China 54 rms
Others
* Note: Joint-ventured properties
2020F 2021F 2022F 2023F-2024F
8 Hotels / 1,052 Rooms 11 Hotels / 1,954 Rooms 4 Hotels / 1,023 Rooms
10 Hotels / 1,485 Rooms 18 Hotels / 3,667 Rooms 10 Hotels / 1,784 Rooms 12 Hotels / 3,229 Rooms
16** MINT is in the process of reevaluating the opening dates of the hotels in the pipeline.
Others
Mixed-Use Business
Mixed-use business comprises residential development and Anantara Vacation Club. In addition to the current projects, MINT has a pipeline of branded residences for sale in order to ensure the continuity of revenue stream in the coming years. Anantara Vacation Club provides stable revenue growth driven by membership growth. In 2Q20, mixed-use revenue declined by 79%, from no activity of residential sales, as well as declining sales activities of Anantara Vacation Club as a result of the COVID-19 outbreak.
17
INVENTORY TO ACCOMMODATE GROWING MEMBERS
229 246
2Q19 2Q20 2024F
No of Units
QueenstownBali
SanyaSamuiPhuket
BangkokChiang Mai
>350
GROWING MEMBERSHIP
PIPELINE
CURRENT PROJECTS
Layan Residences by Anantara, Phuket
Avadina Hills by Anantara, Phuket
Anantara Chiang Mai Serviced Suites
Torres Rani, Maputo
15 luxury pool villas
16 luxury pool villas
44 units in 7-storey condominium building
181 keys for rent & 6 penthouses for sale; 21-storey office tower
100%-owned
50% JV
50% JV
49% JV
Anantara DesaruResidences, Malaysia
Anantara UbudResidences, Indonesia
Silom Office
20 residential villas
15 residential villas
60% JV
50% JV
40% JVNA
Launched 2015
Launched 2018
Launched 2016
Launched 2015
To launch 2020
To launch 2023
To launch 2020
RESIDENTIAL DEVELOPMENT ANANTARA VACATION CLUB
13,29614,671
2Q19 2Q20
+10%
No of Members
China40%
Thailand11%
Singapore8%
Hong Kong8%
Malaysia7%
Others26%
+7%
No of Units
* MINT is in the process of reevaluating the launch dates of the residential projects in the pipeline.
MINOR FOOD
Minor Food – Financial Highlights
19
2Q20 revenue of Minor Food declined by 32% y-y, with the temporary closure of stores and dine in business especially in April & May. On a like-for-like basis, EBITDA pre-TFRS 16 continued to be positive of THB 19 million, from the implementation of cost reduction initiatives. However, its bottom line turned to net loss pre-TFRS 16 of THB 381 million. Including TFRS 16, Minor Food reported net loss of THB 385 million in 2Q20.
* The financials above reflect performance from operation, and therefore exclude non-core items as detailed on page 44.
5,865
3,985 3,985 THB
million
-32%
Revenue
FINANCIAL PERFORMANCE
879
478
19 269
-385 -381
-98% NM
EBITDA NPAT
2Q19 % Margin2Q20 Pre-TFRS 16
15.0% 12.0% 4.6%
OPERATIONAL STATS
-3.6% -23.0% 3.8% -36.8%
2,254 2,362 *
No of Outlets SSSG TSSG
2Q19 2Q20
+5%
3.5%
-8.0%
-25.0%
-25.6% -28.1%
-15.5% -12.9%
11.9%
-0.9%
-24.5%
-47.4%-37.8%
-24.5%-16.3%
Jan Feb Mar Apr May Jun Jul
TSSGSSSG
• Same-Store-Sales: SSSG started to see visible recovery in June, driven primarily by Thailand and Australia hubs as the countries’ lockdown started to ease.
• Outlet expansion: 2Q20 network growth of 5% y-y was a result of expansion primarily in Thailand, part of which is the addition of Bonchon outlets.
• Total-System-Sales: With the recovery of SSSG and the reopening of restaurants, TSS has seen an improving trend every month since April.
2Q20 Post-TFRS 16
0.5%
* Note that during the lockdown, approx only 77% were operational.
Minor Food – International Presence
20
MINT operates three restaurant hubs: Thailand, China and Australia. MINT’s restaurant presence is now in 26 countries across the region, operating owned and franchised business models. MINT continues to look for opportunities to expand, especially in these existing markets.
Hubs
Franchised
Combination
Owned
* Excludes non-core items
67% 65% 74% 64%
33% 35% 26%36%
0%
25%
50%
75%
100%
2014 2019* 1H20* 2024F
International
Thailand
REVENUE CONTRIBUTION
Minor Food Portfolio
21
Minor Food operates outlets that are 50% owned and 50% franchised, while owned outlets is the majority revenue contributor. In terms of geography, Thailand continues to be the most important market, followed by China and Australia hubs.
SYSTEM-WIDE OUTLET CONTRIBUTIONBy Ownership
2Q20 REVENUE CONTRIBUTIONBy Business
SYSTEM-WIDE OUTLET CONTRIBUTIONBy Geography
2Q20 REVENUE CONTRIBUTIONBy Geography
Thailand 72%
Australia8%
China16%
Others4%
Thailand75%
Australia15%
China4%
Others6%
2,363 OutletsOwned
50%
Franchised50%
Owned95%
Franchised5%
2,363 Outlets
THB 3,985
million
* As at end of June 2020 * As at end of June 2020
Operational Stats by Hub
22
Thailand & Australia hubs are seeing visible recovery since June with governments of various countries relaxing the lockdown. The performance of China hub improved consistently since the reopening in late February, but declined slightly in June because of the government’s precaution of the second wave in Beijing, but bounced back on track in July. Minor Food continues to focus on delivery service, both in terms of platform and promotional campaigns, across all hubs in order to help uplift sales momentum.
THAILAND CHINA AUSTRALIA
-5.6%-7.2%
0.8%
-21.8%
SSSG TSSG
2Q19 2Q20
-30%
-20%
-10%
0%
10%
20%
Jan Feb Mar Apr May Jun Jul
1.1%
-27.0%
15.8%
-28.9%
2Q19 2Q20
-100%
-80%
-60%
-40%
-20%
0%
Jan Feb Mar Apr May Jun Jul
-2.3%
-41.7%
-2.1%
-52.8%
2Q19 2Q20
SSSGTSSG*
SSSGTSSG*
-100%
-80%
-60%
-40%
-20%
0%
20%
Jan Feb Mar Apr May Jun Jul
SSSG TSSG SSSG TSSG
SSSGTSSG*
* Closure of dine-in restaurants in Apr & May * Closure of dine-in restaurants in Apr & May* Closure of restaurants in late Jan / Feb
MINOR LIFESTYLE
1,120
571 571
Minor Lifestyle
24
2Q20 revenue of Minor Lifestyle declined by 49% y-y, primarily from the soft retail trading business, especially the fashion business, as outlets were temporarily closed in April and part of May, although contract manufacturing sales was resilient from the sales of sanitizer and cleaning products. Consequently, both EBITDA and bottom line pre-TFRS 16 declined to a net loss of 47 million and 91 million respectively. Similar to other businesses, April was the worst month with improving trends in May & June.
THB million
Revenue
FINANCIAL PERFORMANCE
62
-29 -47 6 -90 -91
EBITDA NPAT
% Margin
5.5%0.5%
Retail Trading
58%
Contract Manufacturing
42%
• Retail trading: revenue declined by 64% y-y, attributable to all brands, from the temporary store closures amidst COVID-19.
• Contract manufacturing: revenue increased by 14% y-y because of strong sanitizer sales and high demand of cleaning products.
OPERATIONAL STATS
1.3%
-60.9%
11.4%
-63.0%
486 473 *
No of Shops SSSG TSSG
2Q19 2Q20
TSSGSSSG
-100%
-75%
-50%
-25%
0%
Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20
THB 571
million
2Q19 2Q20 Pre-TFRS 16 2Q20 Post-TFRS 16
-49% NM NM
* Note that during the lockdown, approx only 68% were operational.
CORPORATE INFORMATION
Elewana Loisaba Lodo Springs
CAPEX & Balance Sheet Strength
26
CAPEX plans includes maintenance, renovations and signed pipeline. MINT has suspended its CAPEX plan in 2020, and only continuing those that are necessary. With the increase in equity from the USD 300 million perpetual bond issuance, netted off with the adverse impact from the adoption of TFRS 16 and net loss in 1H20, interest bearing debt to equity ratio was at 1.63x at the end of 2Q20. Going into 3Q20, the successful rights offering will provide MINT with another THB 10 billion of equity, and MINT-W7 will further strengthen MINT’s balance sheet by another THB 5 billion of equity over the next three years. Covenant waiver throughout the rest of 2020 also provides more flexibility amidst uncertainty and fluid situation. MINT and its senior unsecured debentures have “A” rating by TRIS.
Interest Bearing Debt to Equity Net Interest Bearing Debt to Equity
Internal Policy
X
CAPEX PLANS LEVERAGE
BACK-UP FINANCINGTHB million
0
50,000
100,000
150,000
200,000
Outstanding Debt* & Equity Un-Utilized Facility
Debt31,619
Debt127,082
Note: Cash on hand as at end of 2Q20 is THB 19,514 million
Equity**9,926
* Outstanding debt exclude lease liabilities as per covenant calculation definition** Assume 100% conversion of MINT-W6 (at exercise price of THB 43 per share)
Equity77,9750
5,000
10,000
15,000
20,000
2019 2020F 2021F 2022F 2023F 2024F
THB million
Suspended / Delayed
Minor Food
Minor Hotels
Minor Lifestyle
1.38
1.63
0.75
1.00
1.25
1.50
1.75
1Q19 2Q19 3Q19 YE19 1Q20* 2Q20*
* Interest Bearing Debt excludes lease liabilities as per covenant calculation definition
* CAPEX plan for 2021F – 2024F is according to the original 5-year plan and has not been adjusted amidst the COVID-19 situation
RESPONSE TO COVID-19
Re-opening Progress
28
As the lockdown is being relaxed in various cities and countries, MINT is ready to resume operations in all of its businesses across geographies. Although visibility is still limited in terms of speed and magnitude of recovery, MINT will ensure that demand is sufficient to uplift its performance
before the reopenings.
MINOR HOTELS
MINOR FOOD
Reopening plans:
• Gradual reopening of remaining hotels, with the aim to open all hotels in the portfolio by year-end.
• Focus on domestic market, followed by regional and international markets as countries start to reopen their borders.
• Focus on hygiene and safety of customers and team members.
> 75% of hotels
opened
MINOR LIFESTYLE
> 90% of restaurants
fully opened
Almost 100% of outlets
opened
Europe Spain Italy Benelux Germany Euro Area
Domestic Demand c60% c50% c50% c70% 50-55%
EU Demand 75-80%
Corporate vs Leisure
B2B 30-40%
B2C 60-70%
Asia & Oceania Thailand Maldives Africa Middle East Australia
Domestic Demand 11% - na na 85%
Regional Demand 54% 36% 63% 44% 15%
Corporate 15% 2% 23% 14% 43%
Leisure 85% 98% 77% 86% 57%
* Data as of 2019
Minimizing Cash Outflow
29
Cost Reduction Initiatives
CAPEX Suspension
Dividend Cancellation
o Suspension of staff travels, advisory and training initiatives
o Reduction of marketing and advertising costs especially in low-activity businesses
o Cut of any other unnecessary costs
o Conversations with suppliers for discounts or better payment terms
o Optimization of full time & part time manning and workforce productivity.
o Reduction of salaries and deferral of salary merit increase, both for at least 3 months, across levels and geographies.
o Implementation of “temporary redundancy” scheme in Europe, in order to put some of the payroll on the government subsidy program.
o Application for government subsidies across all geographies.
o Negotiation with landlords globally to reduce or suspend rent payments
Un-prioritized Costs
Suppliers
Payroll
Rentals & Leases
o Drastic reduction of CAPEX, with the exception of:‒ Prior commitments: including the investments in second phase of Bonchon and BreadTalk
Singapore, and NHH’s Boscolo portfolio‒ Maintenance & ongoing projects, such as Avani Khao Lak and Anantara Desaru
o Omission of dividend payment for the year ended 2019, subject to shareholders’ approval
MINT continues to focus on cash preservation and liquidity management, with initiatives from all business units and across geographies. This is an on-going process with the objective to minimize cash outflows throughout business recovery process.
CAPEX cancellation THB 7-10 billion
Cash saving THB 2.3 billion
Cost savings is still on-going. As of today, estimated at:
nearly 25% of 2019 costs & expenses*
nearly 30% of 2020 budget cost & expenses*
* Excl depreciation, interest and taxes
Payroll35%
Leases15%
Supply chain17%
Other Opex32%
2019Actual
CostSavings
2020Budget
2019Actual
CostSavings
2020Budget
24% 26%
19% 24%20% 26%
24% 30%
Cost Saving Initiatives
30
With the effort across business units and across geographies, MINT has been able to reduce costs of up to 25-30% in the four categories, both against actual 2019 and budget 2020 costs & expenses. The initiatives are ongoing as MINT continues to look for further potential cost reductions.
THB million
0
10,000
20,000
30,000
40,000
2019Actual
CostSavings
2020Budget
2019Actual
CostSavings
2020Budget
PAYROLL RENTAL & LEASESSUPPLIERS OTHER COSTS
20,000
40,000
60,000
80,000
Total before COVID Part-Time Reduction PermanentRedundancy
TemporaryRedundancy
Total after Reduction
-28%
-14%
-17%
• Headcount was reduced by approximately 60% during COVID
• In addition, executives at management level have taken up to 60% pay cuts and see other benefits reduced
Minor Hotels (Ex. NH)
9%
NH49%
Minor Food38%
Minor Lifestyle4%
Lease & Rental Saving
Movement of Free Cash Flow – Cash Burn Easing After Lock-Down Peak
With the national lock-downs during the pandemic, adjusted free cash flow turned negative from February onwards. Operating cash outflow peaked in May during the worst months of the pandemic. With cost-cutting measures and CAPEX suspension taking effect, cash burn rate improved from June onwards. The increased business activities, together with cost-cutting initiatives and CAPEX suspension will lead to further free cash flow recovery in the second half of the year.
14.7
-3.8
11.0
2.10.0 -0.2
-1.2-2.9
-0.5-1.3 -1.1 -0.9-0.5
-0.5
-0.8-1.0 -0.8
-3.2 -1.3
-0.3
-0.9
1.9
-4.5-3.3
-1.8-5.0
-2.4
-6.4 -0.2 -1.9 -4.3 -3.0
2019 1Q20 Jan 20 Feb 20 Mar 20 Apr 20
Free CF (after Repayment of Lease Liabilities)
Operating CF
Net CAPEX
Net of Tivoli & Maldivian Asset
Sales
Repayment of Lease Liabilities
-8.7
2Q20
-3.6 -2.1
May 20 Jun 20
Before After
52% - 63%38% - 46%
Before After
43% - 53%32% - 39%
Cost Cutting Helps Reduce Indicative Breakeven Points
With effective cost cutting initiatives implemented on a firm-wide basis, the indicative pre-TFRS16 EBITDA breakeven points of all businesses have declined significantly, resulting in breakeven timelines accelerated to earlier than originally planned.
Before After
49% - 59%
34% - 42%
Minor Hotels – Breakeven Occupancy Breakeven Occupancy – NH Hotel Group
Before After
40% - 48%22% - 27%
Thailand, Asia, Middle East & Africa
Minor Food – Breakeven Sales Level
82%
69%
Before After
Europe & Americas Australia & New Zealand
10,826 keys / 15% of total system 46,164 keys / 65% of total system 7,201 keys / 10% of total system
Hotels breakeven occupancy ranges are indicative and calculated based on EBITDA post charging of rental expenses (with impact of TFRS16 neutralized) but before charging corporate overheads; ADR simulated 10-15% down to budget as a central case with occupancy ranges based on variations of +/-10% around the central case; breakeven after cost cutting is with reference to H2 2020 and applies latest forecast cost structure; breakeven before cost cutting is with reference to FY 2020 (Europe & Americas with reference to H2 2020) and is based on the cost of the 2020 budget; perimeter of breakeven analysis covers c.90% of system keys and is considered by management to be representative of the total system; the c.10% of system keys not covered in the analysis comprises hotels under third-party and JV brands in Thailand and Africa, the hotel management contract portfolio of NH, and certain Tivoli properties in Portugal.
Indicative % at Property Level Indicative % Pre-COVID Sales Level
63%
72%68% 69%
53%57%
51%
64%
53%59%
75%
62%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Minor Hotels: Base-Case Occupancy Recovery & Breakeven
As the lock-down has been eased, Minor Hotels began to re-open its hotels at the end of May, with occupancy expected to gradually recover throughout the remainder of the year. With successful cost-cutting effort and with the re-opening plan focusing mainly around hotels with cash positive potentials, Minor Hotels expects to see breakeven point in 3Q20 under its base-case scenario.
Minor Hotels
Breakeven Occupancy:
Before
After
Last Year
This Year Actual
Thailand, Asia, ME &
Africa
Breakeven Occupancy:
Before
After
Last Year
This Year Actual
This Year Forecast
This Year Forecast
61%
69%71% 73% 72% 73%
71% 69%
74% 75% 75%
62%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
49-59%
34-42%
40-48%
22-27%
Projected occupancies to September are an indicative scenario due to highly fluid business on-the-books situation and should not be construed as forward guidance; breakeven occupancy ranges are indicative and calculated based on EBITDA post charging of rental expenses (with impact of TFRS16 neutralized) but before charging corporate overheads; ADR simulated 10-15% down to budget as a central case with occupancy ranges based on variations of +/-10% around the central case; breakeven after cost cutting is with reference to H2 2020 and applies latest forecast cost structure; breakeven before cost cutting is with reference to FY 2020 (Europe & Americas with reference to H2 2020) and is based on the cost of the 2020 budget; perimeter of breakeven analysis covers c.90% of system keys and is considered by management to be representative of the total system; the c.10% of system keys not covered in the analysis comprises hotels under third-party and JV brands in Thailand and Africa, the hotel management contract portfolio of NH, and certain Tivoli properties in Portugal.
74%80% 79% 77%
73%71%
82% 81%78%
81% 81%
72%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
59%
66%71% 73%
76% 77%74%
68%
79% 78%75%
61%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Minor Hotels: Base-Case Occupancy Recovery & Breakeven
As the lock-down has been eased, Minor Hotels began to re-open its hotels at the end of May, with occupancy expected to gradually recover throughout the remainder of the year. With successful cost-cutting effort and with the re-opening plan focusing mainly around hotels with cash positive potentials, Minor Hotels expects to see breakeven point in 3Q20 under its base-case scenario.
Europe & Americas
Australia & New Zealand
Breakeven Occupancy:
Before
After
Last Year
This Year Actual
Breakeven Occupancy:
Before
After
Last Year
This Year Actual
This Year Forecast
This Year Forecast
52-63%
38-46%
43-53%
32-39%
Projected occupancies to September are an indicative scenario due to highly fluid business on-the-books situation and should not be construed as forward guidance; breakeven occupancy ranges are indicative and calculated based on EBITDA post charging of rental expenses (with impact of TFRS16 neutralized) but before charging corporate overheads; ADR simulated 10-15% down to budget as a central case with occupancy ranges based on variations of +/-10% around the central case; breakeven after cost cutting is with reference to H2 2020 and applies latest forecast cost structure; breakeven before cost cutting is with reference to FY 2020 (Europe & Americas with reference to H2 2020) and is based on the cost of the 2020 budget; perimeter of breakeven analysis covers c.90% of system keys and is considered by management to be representative of the total system; the c.10% of system keys not covered in the analysis comprises hotels under third-party and JV brands in Thailand and Africa, the hotel management contract portfolio of NH, and certain Tivoli properties in Portugal.
0
500
1,000
1,500
2,000
2,500
Minor Food: Re-Opening Plan & Indicative Monthly Sales
Number of Operating
Outlets
Total System Sales
(THB mn)
Minor Food
Thailand Hub
Australia Hub
China Hub
Thailand Hub
Australia Hub
China Hub
Indicative EBITDA Pre-TFRS16 Breakeven before Cost Cutting
Indicative EBITDA Pre-TFRS16 Breakeven after Cost Cutting
Over 30% of total outlets were closed during the peak of the lock-down, while remaining outlets continued serving delivery and takeaway. Minor Food is gradually opening its dine-in outlets from May onwards, with social distancing practice implemented and gradually eased as per government directives. Total system sales are expected to recover to reach pre-crisis level at year-end.
Minor Food’s total system sales are indicative and should not be construed as forward guidance. Breakeven is calculated based on non-variable financial obligations and profitability margins, post-cost cutting with reference to latest forecast of cost structure applied for H2 2020. The impact of TFRS16 is neutralized in the calculation.
Indicative
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Jan-20 Mar-20 May-20 Jul-20 Sep-20 Nov-20
Minor Food
Indicative
0
200
400
600
800
1,000
1,200
Minor Food Capitalizes on Strong Delivery PlatformDuring the lock-down period, delivery sales more than doubled from the prior-year period. Strong delivery sales growth on the back of own solid delivery platform has alleviated adverse impact on dine-in sales. Since dine-in sales came in stronger than originally anticipated due to faster reopening & faster easing of social distancing rule, delivery sales in June & July therefore came in below base-case forecasts with conservative dine-in assumptions.
Delivery Sales
(THB mn)
Total Delivery
SalesGrowth
(%)
0%
100%
200%
Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Jan-20 Mar-20 May-20 Jul-20 Sep-20 Nov-20
Minor Food
Thailand Hub
Australia Hub
China Hub
Indicative
Indicative
Minor Food’s total system sales are indicative and should not be construed as forward guidance.
Liquidity & Debt Management
37
With the impact from COVID-19, MINT has successfully managed its cash position and debt funding, both outstanding facilities and credit lines, in order to ensure sufficient liquidity in the coming quarters.
Covenant WaiverCreditors (both bondholders and banks) have approved:o Waiver of covenant testing (Gross IBD to equity < 1.75x) for the next
3 quarters (until YE20);o With additional negative covenants (until YE20):
MINT’s Credit Rating by TRISo Company rating & existing senior unsecured
debentures reaffirmed at “A”o Subordinated perpetual debentures at “BBB+” o “Negative” outlook assigned to the ratings amidst
COVID-19 situation
USD Perpetual Bondso Ratings of “Baa2” by Moody’s and “BBB” by Fitch
Ratings
Due 2H20o THB 3.5 billion Term Loans in various currencies:
‒ THB 2.2 billion equivalent to be repaid with proceeds from rights offering
‒ The rest to be rolled-over
Due 1H21o THB 4.3 billion THB Bonds
* As at end of July 2020
‒ No M&A cumulatively of over 3% of total assets (excluding lease obligations)
‒ Total debts of not more than THB 150 billion at end of any quarter
‒ No dividend payment
Cash on Hand THB 36 billion
+
Working Cap Facilities THB 26 billion
Covenant Waiver
Debt Maturing
over Next 12 Months
Liquidity Management
Credit Rating
Strengthening of Equity Base
38
MINT has successfully completed its comprehensive capital structure plan, resulting in the strengthening of its balance sheet. Post-transactions & post-conversion, MINT’s pro-forma D/E ratio is close to its internal policy of 1.3x, and well within its financial covenant of 1.75x. Such solid balance sheet will be the foundation for MINT to further build on its first-class quality assets and grow its business sustainably in the long term.
INTEREST BEARING DEBT*
0
50,000
100,000
150,000
2Q20 Short-TermDebt
2Q20 Long-Term Debt 2Q20 OutstandingDebt
2Q20 Shareholders'Equity
Rights Offering(3Q20)
Post-Rights OfferingEquity
MINT-W7 Proceeds(3Q20-3Q23)
Post-Righst OfferingPost-Conversion
Equity
THB million
8,223
118,858 127,082
77,975
EQUITY
+9,858 87,833 +5,088 92,921
D/E: 1.63x D/E: 1.45x D/E: 1.37x
Completion of Comprehensive Capital Raising Plan
of approx THB 25 billion
Perpetual Bonds(USD 300 mn)
Rights Offering Warrants
• 3.1% interest rate
• 3-years non-call feature
• Guaranteed by BBL
• Ratings of Baa2 by Moody’s and BBB by Fitch Ratings
• RO ratio of 8.2 existing shares to 1 new share
• RO price at THB 17.50
• 563,293,156 shares issued
• Warrant ratio of 22 ordinary shares to 1 warrant
• Warrant offering price: free
• Warrant term of 3 years
• Warrant exercise ratio of 1 warrant to 1 share
• Exercise price at THB 21.60
*Excludes lease liabilities
Other trends and business initiatives are being assessed in order to respond to the post-COVID lifestyle.
Medium to Long-term Roadmap - Business Beyond COVID
With the changing of the consumer behavior amidst the COVID-19 situation, MINT will have to adjust its businesses to better serve the customers in the medium to long term. MINT has launched the project Business Beyond COVID with all the business units to craft the recovery path amidst the “new normal” way of living.
39
MINOR HOTELS
Increased reliability of the brands
Hotel sanitary standards over Airbnb
Leisure travel opportunities with working remotely behavior
More cautious consumer spending over next 3-9 months
Increasingly remote-working/VDO conferencing
Business lunches into the office, hotel catering services
Real estate locations/properties undervalued
Real-time demand tracking & revenue optimization
Growing concern over labor costs
Emerging Trends Examples of Immediate Responses
Heightened cleaning & hygiene measures in collaboration with
industry experts
o Anantara: “Peace of Mind”
o NHH: “Feel Safe at NH”
o Avani: “AvaniSHIELD”
o Oaks: “SureStay”
Emphasis on wellness & medi-spa in
partnership with specialists
Anantara & Verita
o Anantara Siam: to focus on boosting immunity
o Anantara Riverside: to focus on longevity & diagnostics
St Regis & Clinique la Prairie Aesthetics & Medical Spa
Focus on keeping the brand on top of mind
of customers
Aspirational campaigns:
o #AnantaraEscapism campaign
o Dare to Dream with Avani
Other trends and business initiatives are being assessed in
order to respond to the post-COVID lifestyle.
Medium to Long-term Roadmap - Business Beyond COVID (Cont’d)
With the changing of the consumer behavior amidst the COVID-19 situation, MINT will have to adjust its businesses to better serve the customers in the medium to long term. MINT has launched the project Business Beyond COVID with all the business units to craft the recovery path amidst the “new normal” way of living.
40
MINOR FOOD
Emerging Trends Examples of Immediate Responses
o All hubs to build on sales momentum of delivery service
o Continue to focus on health and hygiene of employees and customers through “Zero Touch Delivery” program, and adhere to relevant regulations
o Accelerate corporate transformation process, in areas of digital, supply chain, organization and innovation, taking into consideration the “new normal” lifestyle
Rising Home occasion (cooking, digital screens)
Booming of Celebratory emotional needs
Heightened food safety and nutrition concerns
Higher sourcing standards
Expansion of Online grocery retailer
Growing delivery, drive-thru & pick-upbusinesses
MINOR LIFESTYLE
More cautious consumer spending over next 3-9 months
Emerging product demand – “Health is Wealth”, e.g. sanitizing and immune-boosting products
Accelerated shift to digital sales channels
New contingency considerations in lease agreement, e.g. hardship funds, rental adjustment, rate holidays
Emerging Trends Examples of Immediate Responses
Other trends and business initiatives are being assessed in
order to respond to the post-COVID lifestyle.
o Shifted to online channel to boost fashion and household sales
o Focus on the manufacturing of hand sanitizer and other cleaning products